GO
Loading...

Should the UK ban the 'crack cocaine of gambling?'

Association of British Bookmakers

In an age of austerity, the appeal of making a quick buck often sees people turn to gambling. But in the U.K., there are increasing calls for a certain type of gaming machine – which some critics have dubbed the "crack cocaine of gambling" – to be banned.

Fixed-Odd Betting Terminals (FOBTs), also known as B2 machines, allow gamblers to play games such as roulette at high-speed and with relatively high-stakes in their local betting shops. There are currently almost 33,400 of these machines in the 9,112 betting shops across the U.K.

A punter can feed a maximum of £100 ($163) into the machine per go, and - with one roll of the roulette wheel lasting just 20 seconds - could potentially lose this amount almost straight away.

It's not just ordinary punters who find this gambling enticing; the betting business does too. According to the Gambling Commission, the U.K.'s betting regulatory body, each of these machines made an average weekly profit of £825 ($1,342) in 2012, up from £760 ($1,237) in 2011.

Last year, the machines contributed £1.5 billion ($2.4 billion) to the gross gambling yield (the total value of the betting stakes, minus players' winnings) of the industry, which stood at £6.2 billion ($10.09 billion).

(Read more: 'Seismic shift' forecast for online betting firms)

Problem gambling?

The popularity of these machines has not gone unnoticed, and some critics have argued that FOBTs prey on the poorest members of the community.

A report from non-profit organization Fairer Gambling, published earlier this year, argued that bookmakers deliberately targeted the poorest areas with the highest rates of unemployment and poverty.

The report revealed that in the 50 parliamentary constituencies with the highest numbers of unemployed people, there were 1,251 betting shops and 4,454 FOBTs – whereas in the 50 areas with the lowest levels of unemployment, there were just 287 bookmakers and 1,045 FOBTs.

On Wednesday, Labour politician Mark Hendrick said this was a well-known issue.

"The government knows what's happening, but it has deliberately chosen not to take action," Hendrick said at a parliamentary committee debating new gaming machine legislation. "We know what austerity is doing to poor and unemployed people. People are trying to get money from any source and gambling seems like a quick fix and one that is much more prevalent than it was in the past."

But Helen Grant, the minister for Sport, Tourism and Equalities, argued that there was no robust evidence to suggest these machines increased the number of gambling addicts in the country,and called on the gambling industry to do more to investigate the effects of FOBTs on customers.

(Read more: Case against online gambling)

The Institute of Economic Affairs released a report on the machines in April this year called, "The Crack Cocaine of Gambling? Gambling Machines in the UK." The U.K. think tank said that arguments against FBOTs resembled "previous moral panics" about new gambling products.

"The reliance on anecdotal evidence, well-worn rhetoric and unsubstantiated claims about 'addiction' is characteristic of similar panics which were subsequently abandoned when it became clear that the new activity was neither especially pernicious nor particularly contagious," the report said.

The Responsible Gambling Trust (RGT) is currently researching the matter, and is due to publish its initial findings on December 9.

What next for FOBTs?

Concerns about the use of FOBTs have led some critics to call for a complete ban of the machines.

At the beginning of November, Liverpool City Council voted unanimously to prohibit FOBTs, and said it would urge the government to ban the machines or allow councils the power to limit the stakes available on the machines.

(Read more: Slideshow: Big business of illegal gambling)

The Irish government is also moving towards banning FOBTs,with Alan Shatter, the Minister for Justice,Equality and Defence, arguing that the move would help protect vulnerable adults and young people.

But Dirk Venniz, the chief executive of The Association of British Bookmakers (ABB), which represents the gambling industry, said that eight million customers across the U.K. "shouldn't have their leisure time dictated to by a handful of anti-gambling campaigners."

"It is certainly true that you can bet £100 in one go (on FOBTs) if you wish, and some customers like to,but all the industry data shows an average customer plays for about 15-20 minutes and spends £7.55 ($12.29) per session – similar to the price of an adult cinema ticket," he said in article in news website PoliticsHome on Wednesday.

The industry itself is taking steps to reform the use of FBOTs, however. The ABB has launched a new code for "Responsiblegambling and player protection",which advocates allowing players to set their own time and money limits, as well as displaying warnings on the screen when limits are reached.

Grant said she would revisit the issue with the ABB in March 2014, when the organization says its new code will be fully in place.

— By CNBC's Kiran Moodley. Follow him on Twitter @kirancmoodley

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video